Six More States Receive Grant Money for HIEs

As announced last week by HHS Secretary Kathleen Sebelius, six more states received additional grant money to help build their health insurance exchanges (HIEs), required by the Patient Protection and Affordable Care Act (PPACA) (P.L. 111-148). These Exchange Establishment grants (amounting to $181 million) were awarded to Illinois, Nevada, Oregon, South Dakota, Tennessee, and Washington, bringing the number of states that have received such grants to a total of 34. More than $856 million in Establishment grants have been awarded to date.

HIEs are being implemented to help effectuate the PPACA requirement of all individuals obtaining health insurance coverage by 2014, known as the individual mandate. HIEs, established in every state, will make affordable coverage available to uninsured individuals that lack access to affordable minimum essential coverage and to small businesses looking to provide group coverage to their employees. The exchanges will provide “one-stop shopping,” including information regarding the private health insurance plans that are available to individuals and and small businesses and, as HHS touted, ensure that consumers have the same options as members of Congress. Consumers in every state will have available coverage through HIEs by January 1, 2014. If a state does not create its own exchange, those consumers will be able to obtain coverage through the HHS-operated federally-facilitated exchange (FFE).

Grants to date

Since 2010, over $1 billion in exchange-related grants have been awarded to states. Forty-nine states have received $54 million in Exchange Planning grants in 2010, and in 2011, seven states received $249 million in Early Innovator grants. These most recent grants are in the form of Level One Exchange Establishment grants (Illinois, Nevada, Oregon, South Dakota, and Tennessee), providing one year of funding to states that have begun the process of building their exchange, and a Level Two Establishment grant to Washington, receiving the multiple year funding for being further along in the process. Washingtonis only the second state to receive the Level Two Establishment grant; Rhode Islandwas the first.

States’ plans for operating HIEs must be approved or conditionally approved by HHS no later than January 1, 2013 so that coverage can begin in 2014. [Conditional approval is available where a state is in advanced preparation but cannot demonstrate its readiness by the 2013 deadline.] Final rules governing the new HIEs were announced back in March. (See a recent post discussing these rules.)

Guidance documents released

Also announced by Sebelius were further guidance documents including the Exchange Blueprint and guidance on FFEs.

The Exchange Blueprint is required to be completed and submitted by a state to document how its exchange meets all requirements and to demonstrate that it is ready to execute exchange activities in order to receive HHS approval/conditional approval for its exchange, and reinsurance and risk adjustment programs. The Blueprint guidance document spells out the options available to states to meet the HIE mandate: whether through a state-based exchange, a state partnership exchange, or a FFE. Blueprints must be completed by states seeking to participate in the state-based or state partnership exchanges no later than 30 business days prior to the approval date of January 1, 2013 (November 16, 2012) and consist of two components: a declaration letter, containing basic information about the state’s designated exchange model and signed by the governor, and an exchange application, listing the activities the exchange must perform to be compliant with regulations. Additional details and specifics related to the Exchange Blueprint and application process is available from the Center for Consumer Information and Insurance Oversight (CCIIO) website.

Information is available regarding establishing a partnership with an FFE for states that will not establish their own HIE. In such states, HHS will administer all HIE functions. FFEs will operate under four guiding principles: (1) be committed to consumers to ensure that they all have access to high-quality, affordable health coverage options through a state-based exchanges, partnership exchanges, or FFEs; (2) ensure that FFEs are competitive and equal to other exchanges, minimize administrative burdens, and protect consumers; (3) leveraging the traditional state role to help implement some FFE components; and (4) seek input from, and communicate progress to, stakeholders. Further details are available from the CCIIO.